President, CEO, and chairman of the board for T&M Associates (Hot Firm #73 for 2016), a 350-person engineering firm based in Middletown, New Jersey.
By Liisa Andreassen
Gary Dahms, PE, PP, CME, has been with the firm for more than 30 years. Since 2012, he’s served as president, CEO, and chairman of the board. During this time, he’s spearheaded the firm’s evolution from a municipal engineering firm into a full-service, multi-disciplined consulting company with 19 offices in eight states.
“The workforce consists of baby boomers, Generation Xers, and millennials, and each group has different drivers, motivators, and are at different points in their careers,” Dahms says. “However, when their individual goals and career progression paths are aligned with corporate goals and there is engagement from the top down, we all succeed.”
A CONVERSATION WITH GARY DAHMS.
The Zweig Letter: The talent war in the A/E industry is here. What steps do you take to create the leadership pipeline needed to retain your top people and not lose them to other firms?
Gary Dahms: We’ve developed clearly-defined, career progression paths to help us cultivate, retain, and attract exceptional employees in all areas. We work to provide guidance, consistency, and an environment that fosters career growth and opportunity. Each path is unique and shaped by factors such as skill set, ability, interest, availability of appropriate opportunities, performance, and motivation.
As a means to this end, we provide a variety of resources to help guide employees down their chosen path. We have continuous company-sponsored training on many levels and platforms including our own T&M University. We provide project management training and tools and give them opportunities to attend conferences and trade shows. We offer tuition assistance and have assembled a “Young Professionals” group. We’ve chartered a Toastmasters International club which focuses on improving our employees’ public speaking abilities while boosting confidence and building leadership skills.
We’ve also implemented a social recognition program where employees can give recognition to others based on T&M’s core values. The internal visibility of acknowledging superior performance as it relates to these values has proven beneficial to our positive workplace culture.
TZL: As you look for talent, what position do you most need to fill in the coming year and why?
GD: We’re looking for all levels, but mid-level project managers across geographies and practices are our highest priority. We’re continually searching for technical experts to expand on our existing capabilities and that align with growth.
TZL: While plenty of firms have an ownership transition plan in place, many do not. What’s your advice for firms that have not taken steps to identify and empower the next generation of owners?
GD: Start now, it’s never too early. We’re wholly owned by company employees. Our stockholders are the owners and leaders. The program we have in place maps out the criteria and steps that need to be taken from any stage in their career to become a stockholder. Regardless of age, our stockholders range from millennials to baby boomers and they must be motivated to improve, innovate, and grow the business. A clear vision and strategic plan for the future helps us to identify those next generation leaders who will help lead the firm to those goals and beyond.
TZL: Monthly happy hours and dog friendly offices. What do today’s CEOs need to know about today’s workforce?
GD: Although you will not find any animals roaming our offices, we do have our fair share of happy hours, social engagements, and community outreach events. Company culture is important. The workforce consists of baby boomers, Generation Xers, and millennials and each group has different drivers, motivators, and are at different points in their careers. However, when their individual goals and career progression paths are aligned with corporate goals and there is engagement from the top down, we all succeed.
Today’s workforce wants more than just a 9 to 5 job. They want to find the right company with the right culture and purpose. They desire an environment that supports advancement, innovation, and cutting-edge tools to advance their career. Everything is more personalized now. No two paths are the same.
TZL: Zweig Group research shows there has been a shift in business development strategies. More and more, technical staff, not marketing staff, are responsible for BD. What’s the BD formula in your firm?
GD: Our clients are diverse – they range from Fortune 500 companies to small municipalities. Our business development strategy is a hybrid of traditional marketing/business development representatives and seller-doers. We find the seller-doer model is more effective with the more technical clients/practices while the traditional marketer/business developer is more effective in the municipal consulting arena.
Both technical and marketing BD staff present at national, regional, and local conferences; are published in various business and trade publications; and are award winners who represent T&M as subject matter experts and thought leaders.
Our BD formula is continually being refined based on geography, client, practice, technology, etc. We have found that our strategic plan is shifting from the pure BD models to compete on a technical level, but the traditional BD model still works to establish and retain relationships.
TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?
GD: Although always focused on growing our core services – water resources, environmental, real estate development, municipal/public works and transportation – we’ve expanded our service/practice lines. These emerging practice areas – technology (GIS, automation, and IT), energy, construction management/project management – are stand-alone and open up new opportunities with new clients, but are also complementary to our core
services/clients. For example, energy services are both a new market for us and also a service we can offer to many existing clients.
TZL: The list of responsibilities for project managers is seemingly endless. How do you keep your PMs from burning out? And if they crash, how do you get them back out on the road, so to speak?
GD: The project manager is the most critical position – it determines success – and since projects are the lifeblood of our business, the job carries a lot of responsibility. To prevent burnout, growing into the role takes time and commitment and our Career Progression Paths help lead project managers down that chosen tract.
Assembling the right team from the start and effective team collaboration is critical. From client management and opportunity tracking to technical input and project closeouts, the project manager is only one person on the project team. Regular communication, a clear project work plan, project review meetings, early identification of risks and potential problems, and swift problem-solving and corrective action are essentials for every team. Project managers pull support from the operations managers, practice leaders as well as technical folks.
TZL: What is the role of entrepreneurship in your firm?
GD: Entrepreneurship plays a key role. It’s evidenced in our growth over the past 50-plus years. In 1966, T&M employed seven people and served the municipal sector. Now, we have 350 employees who service a variety of clients. Our entrepreneurship/intrapreneurship got us there. Innovation is all around us. We need to do everything possible to keep the new ideas, strategies, and technologies flowing. Our distribution of profits is designed to reward those innovators who have contributed toward our success.
TZL: In the next couple of years, what A/E segments will heat up, and which ones will cool down?
GD: Hot segments are urban redevelopment, infrastructure (water, sewer, transportation), and environmental. I don’t see any segment so much cooling as changing. There are segments that are cyclical or rely on funding opportunities (e.g., real estate or transportation), and what allows us to weather these changes in demand is our adaptive ability. Our talent is diverse and their training has allowed them to morph to the changing landscape.
TZL: With overhead rates declining over the last five years and utilization rates slowly climbing back up to pre-recession levels, how do you deal with time management policies for your project teams? Is it different for different clients?
GD: To manage our time more efficiently, we’ve been more proactive with upfront planning and preparation, standardizing procedures, and delegation of resources. If everyone is on the same page, that allows us to share resources.
TZL: Measuring the effectiveness of marketing is difficult to do using hard metrics for ROI. How do you evaluate the success/failure of your firm’s marketing efforts when results could take months, or even years, to materialize? Do you track any metrics to guide your marketing plan?
GD: Generally, yes. We track opportunity win/loss; gather statistics from digital marketing; determine cost of sales versus project cost with overhead numbers; and monitor hit rates on proposals. Our practice business plans have specific, targeted growth and are tied to key metrics – staffing, geographies, etc. Our structure is so that operations managers and practice leaders work together. It ties back to seller-doer versus traditional BD strategy. If we can better define marketing efforts, it will relate to overhead rates and grow business.
TZL: The last few years have been good for the A/E industry. Is there a downturn in the forecast, and if so, when and to what severity?
GD: We’ve seen a great deal of growth in the past few years, but I don’t see a real downturn – perhaps more of a leveling off. A lot of our personal growth can be attributed to recovery efforts in the New Jersey region due to storms such as Irene and Sandy. Sustainability/resiliency are still high on the priority list, but it’s plateauing.
TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?
GD: Go with your gut. Trust yourself when deciding on business partners or the direction of the company. Finding the right leadership for the company needs to align on many levels and the culture needs to align with strategic goals.
TZL: While M&A is always an option, there’s something to be said about organic growth. What are your thoughts on why and how to grow a firm?
GD: Our greatest success has been with strategic hires. For us, it’s the best market builder. We acquire an individual with a small team, provide assets to grow and they build the business. For example, in the Midwest region, we hired a local super star who brought in five people to start up our Columbus, Ohio office. That office has now grown to more than 50 people with seven satellite offices. We have a healthy balance of M&A and organic growth.
TZL: What’s your prediction for 2018?
GD: Modest growth in our core services and existing geographies and improved performance over last year. We will continue to attract and retain key leadership talent, keep succession and transition in focus, and bring in high priority succession planning.
Winners from Zweig Group’s Hot Firm and A/E Industry Awards Conference are highlighted in The Zweig Letter, in addition to being celebrated at the conference. Click here to learn more about Zweig Group’s awards.